Who Owns Your Drinking Water?

Who Owns Your Drinking Water?

“The Struggle for Latin America’s Water”

Should your supply of drinking water be controlled locally, or by absentee landlords? Water is a precious natural resource, part of the common heritage of all humanity. But artificial situations can endanger the rights of individuals.

by Maude Barlow and Tony Clarke

Latin Americans take the global lead in demanding water democracy

Latin America is blessed with an abundance of fresh water. The region contains four of the worlds 25 largest rivers — the Amazon, Paraná, Orinoco and Magdalena — and their combined run-off of 5,470 cubic miles almost equals the combined run-off of the other 21. Some of the worlds large lakes are also located in Latin America, including Maracaibo in Venezuela, Titicaca in Peru and Bolivia, Poopo in Bolivia, and Buenos Aires, shared by Chile and Argentina. Twenty percent of global runoff — the renewable water source that constitutes our fresh water supply — comes from the Amazon Basin alone. The region as a whole has one of the highest per capita potential supplies of fresh water in the world — a little less than 110,500 cubic feet per person per year. Geography, pollution and social inequality, however, badly skew Latin Americans access to water.

As a relatively parched country, Mexico has a miniscule potential supply of approximately 13,000 cubic feet per person/year. Natural desert is merging with a spreading human-induced desert over much of the Valley of Mexico, the countrys cradle of pre-conquest civilization and present-day home of the nations capital. Once called the Venice of the New World due to its being built atop a lake and intersected with canals, Mexico City is now sinking in on itself as it drains the last of its accessible aquifers from the lakebed below.

In South America, human-induced salination is causing desertification in significant parts of Peru, Bolivia and northwestern Argentina. In total — factoring in the large natural deserts of Patagonia in southern Argentina and the Atacama in northern Chile — about 25% of Latin America is now arid or semi-arid. Most of the Caribbean is also fresh water deprived, since the islands are too small to have substantial rivers.

Poor farming practices, unregulated industrialization and urban poverty have massively and negatively affected Latin Americas water resources. In most large cities, over 50% of the water supply is lost through infrastructure leakage. Some cities lose almost 90% through leaky pipes. Mexico City now depends on aquifers for 70% of its water and is mining these underground sources up to 80 times faster than they are naturally replenished. Meanwhile, São Paulo is threatening residents with water rationing. The city is relying on sources farther and farther away, hiking the cost of delivery beyond many peoples ability to pay for it.

Throughout the region, water basins and aquatic habitats are routine dumpsites for garbage, mining effluent, and industrial and agricultural waste. Pollution in the waterways along the U.S.-Mexico border is so bad that some refer to it as a 2,000-mile Love Canal, in reference to an upstate New York neighborhood that was declared a federal emergency in 1978 because of chemical contamination. And only parts of Eastern Europe and China exceed Brazils levels of waterway contamination. Most of Latin Americas wastewater still flows untreated back into its rivers, lakes and canals.

Rampant poverty is another factor. After years of ‘structural adjustment’ imposed by the World Bank and International Monetary Fund, as a region, Latin America has the most inequitable income distribution in the world. Mirroring this is a pattern of tremendously unequal access to water. More than 130 million people have no safe drinking water in their homes, and only an estimated one out of every six persons enjoys adequate sanitation service. The situation worsens as policies favoring industrial agriculture drive millions of subsistence farmers into the cities overpopulated slums every year.

The destruction of water sources, combined with inequitable access, has left most Latin Americans water poor. And millions live without access to clean water at all. While the regions available resources could provide each person with close to 110,500 cubic feet of water every year, the average resident has access to only 1,010 cubic feet per year. This compares to North Americas annual average of 4,160 cubic feet and Europes 2,255.6

An influx of private, for-profit corporations into the region over the last decade has exacerbated the problems of scarcity, urbanization, pollution and inequitable access. Private water companies, determined to take advantage of Latin Americas water crisis, are operating or planning to operate in most countries of the region, including Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, Peru and Uruguay.

Most of these companies are local subsidiaries of the three largest multinational water service companiesSuez and Vivendi of France, and RWE-Thames Water of Germany (the Big-3). A decade ago, the Big-3 serviced only 51 million people in just 12 countries. Together, the three now deliver water and wastewater services to almost 300 million customers in over 130 countries. Suez and Vivendi control over 70% of the existing water service market worldwide. All three are ranked among the wealthiest 100 corporations in the world with combined annual revenues in 2002 of almost $160 billion and an annual growth rate of 10%, outpacing many of the national economies in which they operate.

Often, the World Bank and the Inter-American Development Bank (IDB) facilitate the aggressive entry of these companies into Latin American markets. Both Suez and Vivendi use their considerable clout among multilateral lenders to make private water delivery a condition for debt relief or new loans. In fact, some of the largest IDB loans of the last decade went directly to transnational water companies for the operation of private water concessions in countries like Argentina, Bolivia and Honduras.

Meanwhile, the World Bank has decided to triple its annual financing commitments to global private sector water projects. After a decade of lucrative assistance from the World Bank, the Big-3 are now demanding guaranteed financing to insulate themselves from foreign currency fluctuations before making any new investments in developing countries. At the same time, the major water privateers are facing mounting and fierce public opposition to their operations in many parts of Latin America. As in the rest of the world, the damaging effects of water privatization are well-documented: rate hikes, cut-offs, reduced water quality, secret contracts, bribery and corruption.

Arguably, the best-known reaction to water privatization occurred in Cochabamba, Bolivia when the engineering giant Bechtel set up its subsidiary, Aguas del Tunari, in early 2000 and immediately raised the price of water beyond the reach of the vast majority of the population. Its contract even gave the company the right to charge people for the water they took from their own wells and to send collection agents to homes to charge for rainwater collected in cisterns on roofs.

Consumers were hit with up to 200% rate increases as the company planned for annual profits of $58 million.8 Public protests forced the government to reverse this privatization effort, but Bechtel is now suing Bolivia for $25 million in “lost profits.” Despite the fiasco in Cochabamba, the Bolivian government is still pursuing several other privatization schemes, including plans to export and sell bulk water to neighboring Chile for use in its mining industry.

In 1992, the Salinas administration in Mexico modified the Constitution to allow foreign-based corporations to obtain water contracts and concessions and introduced a new national water law permitting global corporations to invest in Mexicos water utilities. Later, as part of its national development agenda, the Zedillo government handed over responsibility for water and sewage services to municipal governments.

Former Coca-Cola executive Vicente Fox, the current Mexican president, has been even more aggressive in pursuing privatization. In the wake of September 11, his administration declared water a matter of national security. That actually meant allowing military operations and anti-terrorism measures to be applied against anyone seen as opposing the governments plans for restructuring and privatizing the water sector.

Also in 2001, the Mexican government created a special program to advance privatization, and received hundreds of millions of dollars from the World Bank for it.

All across Latin America, citizens are taking to the streets, organizing referenda and petitions, and fighting for access to water. Latin American activists and academics are on the front line of the global “water justice” movement, speaking at international conferences, protesting World Bank policies and organizing for a binding UN Convention on the right to water.

On August 22, 2003, 47 grassroots organizations from 16 countries in the Americas met in San Salvador where they launched a new movement called RED VIDA. This Inter-American network of water activists issued the San Salvador Statement for the Defense of and the Right to Water. Many of the member groups of this new network played pivotal roles at the World Water Forum in Kyoto, Japan in March 2003, where the World Bank and the big water companies tried unsuccessfully to sell their privatization consensus to the world.

When the Big-3, the World Bank and their allies tried to convince the Forum participants in Kyoto to adopt public-private partnerships as the best model for the delivery of water services, civil society organizations and water activists from around the world formed an alliance to obstruct this agenda. Calling themselves water warriors, alliance members went on to effectively challenge the predetermined consensus as it applied to nine other theme topics of the Forum. RED VIDA also played a prominent role in launching the Peoples World Water Movement, which took place at a summit in New Delhi on the eve of the 2004 World Social Forum in Mumbai, India. RED VIDA members forged strong alliances with Indian groups that are also battling the invasion of private water companies.

For almost 20 years, the people of Latin America have been combating neoliberalism, with varying degrees of success. But the move to commodify their water for the benefit of faraway investors has injected new life into this effort. It is as if a line in the sand has been drawn. Because people cannot live without water, there is a distinctive urgency and tenacity to this struggle. Their demand for water democracy will not be silenced.

Maude Barlow is Chairperson of the Council of Canadians and Tony Clarke is the Director of the Polaris Institute. Their book, Blue Gold: The Fight to Stop Corporate Theft of the World’s Water (New Press, 2003) is now available in Spanish.

We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.

Water as a natural resource is the equal property of all residents of the planet and each individual person should have an unalianable equal right to free access to a minimum daily supply of that life giving supstance as much as is physicaly possible.

Water rights beyond the individuals daily requirment to live should not be privatized by any person or corporation under any circumstances.

All water rights that have already been granted as private property by some governments should be taxed like land or other real estate.

Any private ownership of water rights beyond ones natural equal rights should be considered as a privilege and should be taxed accordingly.

All water resources should be “propertized” in such a way that it is held in common all under the control and managment of public non profit taxable trusts or local muninciple or county governments which will be charged with the responsibility to guard the public trust and the equal water rights of each individual person within their jurisdiction.

Water companies now organized as enterprise departments or public companies owned and operated by local governments should be strengthened and invested in so they can aquire the most modern technology and capital available on the market for the effecinent development and conservation and distribution of all our water resources.

Consevation and rationing of the water can then be managed by a progressive pricing system. Each person gets his/her minimum daily requirment for free except for the minimum cost of infrustructure for water treatment and delivery by pipes to their homes.

After that, incremental water use can be priced at gradualy progressive price tables so that people who use more than their daily minimum pay incrementaly more for each bracket amount of water they take or draw from the common supply.

Any surplus revenue collected by the water company after investing that revenue on infrustructure improvements, even if it is organized as a non profit trust, should then be paid over to the munincipality or distributed as equal payments to each resident of the community as a citizens dividend.

Including integrative curriculum topics of water, food, money, relationship, and entertainment as focal points for standard fare in k-12 is essential to creating a civil structure of justice. These five areas are relevant to each student and understandable as seed thought.

Advertise here.

Arts & Letters

Geonomics is …

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.

more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part and parcel of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.

a way to connect the dots. Making the cyber rounds is “The Cavernous Divide” by Scott Klinger, from AlterNet (posted March 21): “As the number of billionaires in the world expands, so does the number of those in poverty.” Duh. The yawning income gap is not news. Nearly every issue of our quarterly digest carries a similar quote. Yet the connection was worked out long ago by one of America’s greatest thinkers, Henry George, who labeled his masterpiece, Progress and Poverty. Techno- and socio-advances always enrich few and impoverish many. Yet progress also pushes up location values – the geonomic insight (is Silicon Valley cheaper now or more expensive?). Instead of taxing income, sales, or buildings, society could collect those values of sites, resources, EM spectrum, and ecosystem services via fees and dues, which would lower the income ceiling, and instead of lavishing corporate welfare, pay out the recovered revenue via dividends, which would jack up the income floor. Dots connected.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.